How to Use Your Federal Tax Rebate to Survive the Looming Recession

Starting this month, over 130 million households should receive economic stimulus payments, reports the Internal Revenue Service. Each taxpayer with a valid social security number who has at least $3,000 of income and has filed a 2007 federal tax return is eligible to receive up to $600 ($1,200 for married couples). Parents will receive an additional $300 for each of their eligible children under age 17. While many will be tempted to apply the rebate checks toward outstanding credit card debt, another option exists that will help stimulate the economy while also preparing people for the tough times that may be ahead. It may sound silly, but Americans should consider using their rebate checks to purchase an extra freezer.

With an extra freezer, families can save money by purchasing food in bulk, especially from member warehouses, and stocking up when the supermarkets run exceptional sales and specials. Having an extra freezer also reduces prepared food waste, as leftovers can be frozen to serve as quick meals later. Similarly, a freezer enables busy people, who might normally spend a great deal on fast food and/or eating out, to prepare meals in advance and freeze them so that they have convenient options when time is short.

Upright freezers range in price from about $250 to $1700, and chest freezers cost between about $200 and $700. Since the purpose of purchasing the freezer is to save money, energy efficiency should be an important consideration when comparison shopping. Chest freezers tend to be more energy efficient than upright models, and ENERGY STAR qualified freezers use at least 10 percent less energy than required by current federal standards, according to the U.S. Environmental Protection Agency and the U.S. Department of Energy.

Speaking of energy, using a federal tax rebate to improve energy efficiency around the home, which reduces utility costs, is not a bad idea, either. Some ideas for conserving energy include: upgrading to more energy-efficient appliances; replacing traditional light bulbs with compact fluorescent lights; installing low-flow showerheads; insulating the water heater; and purchasing shades for windows or planting trees strategically in order to block out light and heat.

Remember, the purpose of the IRS tax rebates is to stimulate the economy, so Americans shouldn't be afraid to spend the funds. The key is to spend them wisely. And who knows? Careful shoppers may even find themselves with a little left over to splurge.